Page 25 - Banking Fiannce March 2018

COVER STORY

TERM LOAN

APPRAISAL

WITH DSCR

Introduction: when we understand the fundamentals of credit appraisal
in general and term loan appraisal in particular, the future
Many younger generation officers are joining the banks like
is bright for the industry and future leaders of banking.
never ending waves year after year. Unlike olden days the
percentage of people joining the bank with commerce back
ground is becoming a rare commodity. Now seeing MBAs, Term Loan in commercial banks:
Engineering graduates, etc. are common in the work place. The Term Loan as a regular concept is inducted in the
In this juncture the need for certain basic appraisal functions commercial bankers precisely after the landmark year in the
of banks and hidden meanings in that process is well banking industry i.e., 1990-91. The year of globalization and
pronounced. privatization introduced by Dr. Manmohan Singh, the then
finance minister. Earlier to that there was a clear cut

Many a times the youngsters are learning banking through demarcation between commercial bankers and term lending
trial and error or turning the book and leaning the work. institutions. The banking industry itself was clearly
Banking being the backbone of the economy of any country, segmented into Term Lending institutions and Commercial
Banks.

About the author The Term Lending institutions were taking care of long term
funding of term loans through their expertise in this field,
V Sundararajan the commercial bankers were happy with their bread and
LL.B., CAIIB, DCBA butter the working capital finance. Post Liberalization,
Assistant General Manager
Union Bank of India Staff College Privatization and Globalization (popularly known as LPG) the
Bengaluru demarcation of Term Lending institutions and Commercial
Banks were removed. Introduced amidst this chaos with

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